Rainy Day Pennies | Debt Free Living and Personal Finance

For the first time in five years, I am debt free again. What a big difference not owing a darned thing to anybody makes.

It all comes at a really good time too. With the words of a recession looming, housing bubbles a burstin’, presidential elections, banks begging for a handout from the feds, value of the dollar dropping, and inflation rising, it’s not a good time to owe things to a bank. Banks are in a pickle with the mortgage fiasco, and some seem to be passing the “value” onto their responsible customers.

Take Bank of America for example. I never wanted to be a BoA customer, but unfortunately they acquired my oldest credit card account that I’ve had open since 1993. If I cancelled, I would take a FICO hit. So reluctantly, I’m stuck with them.

A couple of months ago as I was paying down the last of my debt at 1.99% balance transfer rate, I received a letter in the mail from them saying they would be raising my purchase interest rate from 9.99% to 18.99% because of my “high balance”. What the heck? I always paid on time, more than the minimum balance, and my credit to debt ratio was consistently falling each month.

Seems I’m not the only one with prime FICO score of 675+ getting hit with a substantial rate hike, according to The Consumerist’s article Bank of America Angers More Customers With Unjustified Rate Hikes. Reasons sound similar – BoA says your balance is too high, you’ve been paying on time so they can’t hit you with late penalties, therefore they’ll find another way to make you pony up.

I don’t know if they were trying to evoke this response in some masterminded scheme to get some liquidity out of prime borrowers, but I called up my parents and asked for a short term loan of $3000 that I would pay back in 3 months. I paid off BoA and the last of my credit debt.

One of the things I’d like to be the goal of this blog is to help people get out from under the thumb of credit card companies. I know how terrible it was for me and the many times that I thought I would never get out of it. Despite the best efforts of BoA and others to try and force fees out of me (changing my billing dates/cycles, reducing my grace period terms, increasing rates, etc) I did get out of it. I’ve been “there”, and I hope as many people as possible can get “here” too.

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Credit Cards by Cathy